Merit, excellence and intelligence: an anti-DEI approach catches on

It’s known as MEI, short for merit, excellence and intelligence. As described by Scale AI Chief Executive Alexandr Wang, who helped popularize the term, MEI means hiring the best candidates for open roles without considering demographics.

“A hiring process based on merit will naturally yield a variety of backgrounds, perspectives, and ideas," he wrote on his company’s website last month, adding that casting a wide recruiting net was important. “We will not pick winners and losers based on someone being the ‘right’ or ‘wrong’ race, gender, and so on."

Wang declined an interview request.

Whether diversity does, in fact, happen naturally in what Wang and others deem merit-based systems is hotly contested a year after the Supreme Court ruled against affirmative action in college admissions. Businesses that say they are meritocracies are often disproportionately white and male. Apart from truly objective performance metrics, excellence is in the eyes of beholders. And those beholders tend to view people like themselves as more promising and accomplished.

“Saying you hire for merit, excellence and intelligence is really saying people who are historically underrepresented are not worthy," says Seena Hodges, a DEI consultant who calls herself the Woke Coach.

Some job seekers—mostly white guys—tell me they hope MEI catches on. They fill my inbox with stories of being passed over for jobs and promotions because, in their view, companies are determined to hire women and people of color.

DEI backlash

The embrace of MEI by some prominent business leaders—including Coinbase CEO Brian Armstrong and Sequoia Capital partner Shaun Maguire—reflects frustration with corporate diversity initiatives.

Human-resources professionals who have led DEI programs say efforts like unconscious bias training, or recruiting from historically Black colleges and universities are intended to make personnel decisions more meritocratic by ensuring people’s identities don’t hold them back.

Yet even champions of DEI policies say plans to diversify companies are sometimes articulated poorly or carried out in ways that appear to go beyond leveling the playing field, such as when businesses pledge to hire more people of one race.

Hodges says some DEI programs have been set up to fail. Companies may underinvest in them or appoint inexperienced diversity chiefs not trained to withstand the inevitable pushback.

SHRM, the country’s leading human-resources lobby, dropped “equity" from the name of its diversity program this month, saying the shortcomings of some corporate approaches had triggered “societal backlash."

Microsoft and Wells Fargo prompted Labor Department inquiries when they pledged, after George Floyd’s murder in 2020, to double their numbers of Black leaders. Though ultimately found to be in compliance with antidiscrimination laws, DEI critics say such targets amount to quotas that disqualify other applicants based on race or gender.

That tension is now in the brightest of spotlights, after President Biden abandoned his re-election bid and endorsed Vice President Kamala Harris. Biden picked Harris as his running mate four years ago, after vowing to consider only women for the job. Almost immediately, some political opponents began painting Harris, who is Black and South Asian, as a “DEI hire."

MEI frames diversity as a byproduct of good hiring, not a goal in itself. Academic research suggests it may not be so simple. Asked to simulate awarding merit bonuses, veteran managers who participated in a study conducted by MIT and Indiana University doled out 12.5% more money to imaginary male employees than to equally performing women.

How it works—or doesn’t

Bosses who subscribe to a MEI philosophy say proponents of DEI are right about one thing: the pitfalls of unconscious bias. But to MEI devotees, hidden biases are problematic because they can lead to bad hires, not because they can produce a nondiverse workforce.

Jim Kandrac, CEO of Contract Guardian in Naples, Fla., says he’s always tried to hire the most qualified applicants to his firm, which manages corporate healthcare contracts. But people he clicked with personally didn’t necessarily turn out to be strong employees, forcing him to consider his blind spots.

“I’d interview someone and think they were great, so I’d hire them—and too often it wouldn’t work out," he says.

Now he says he finds good talent by having a panel of three colleagues interview candidates before he does. Kandrac, 63, rejects diversity goals and doesn’t track worker demographics but says a diverse mix follows organically when more people are involved in hiring.

Shared interests or backgrounds can cloud managers’ judgments, says Matt Cole, CEO of Strive Asset Management in Dublin, Ohio. He says he’s trained himself and his leaders to put skill and experience at the fore of candidate assessments, while keeping in check the affinity they might feel for applicants who share their alma maters or hobbies.

Cole, 39, says his MEI approach has produced a diverse team of about 40 employees that includes women and people of color in leadership. What separates him from many other executives, he says, is that he would be fine if his staff didn’t have people of different races and genders.

“I really don’t believe that diversity on the basis of skin color or gender is a goal," he says. “It’s a likely—but not guaranteed—byproduct of a meritocratic process."

Hope and fear

Despite claims of reverse discrimination in individual cases, one large study found no strong evidence that it is widespread.

In the months before and after Floyd’s murder, which triggered many of the DEI initiatives being scrutinized today, economists at the University of Chicago and the University of California, Berkeley sent 83,000 fake job applications to 108 companies in the Fortune 500. The overall response rate for applicants with distinctively Black names, like Antwan and Lakeisha, was 2.1 percentage points lower than for candidates with white-sounding names such as Chad and Meredith.

Results varied widely from one business to another. Most often, the response gap was so small that researchers couldn’t confidently say an employer favored one race over the other. In a few cases, the response rate was slightly higher for applicants with Black names. At a larger share of companies, about one-fifth, researchers concluded discrimination against Black candidates was likely.

“DEI initiatives force leaders to think about their process to try to eliminate implicit bias, and our paper suggests that could be a substantial good," says Evan Rose, co-author of the study, which was published by the National Bureau of Economic Research.

Human-resources professionals warn biases could creep further into hiring if DEI goals fade and MEI principles take their place.

Jeffrey Artis is monitoring this HR tug of war closely from his position as CEO of Genesys Works, which annually places about 800 high-school seniors—93% people of color—in internships at companies such as Accenture, Salesforce and AIG.

The students he serves could stand to lose as businesses de-emphasize diversity, though he says interest from his nonprofit’s corporate partners remains strong. He hopes the work experience Genesys offers will help their résumés stand out in a hiring environment where employers don’t try as hard to recruit from underrepresented populations.

“The rhetoric changes every five years," Artis says. “What doesn’t change is companies’ need for the best talent."

Write to Callum Borchers at callum.borchers@wsj.com